Definitive Data on the “January Barometer”
- Joshua M Brown
- January 6th, 2014
Thanks to BofA Merrill Lynch’s chief technician Stephen Suttmeier for this bit on the January Barometer, one of only a handful of truly useful calendrical indicators…
January Barometer: As January goes, so goes the year
Does the January Barometer work? Based on S&P 500 data going back to 1928,
January is a good predictor of the year. When January is up, the year is up 80% of
the time with an average return of 13.0%. When January is down, the year is up
only 42% of the time and the S&P 500 has an average decline of 2.3%. This
compares to positive annual returns 66% of the time and an average return of 7.5%
for the S&P 500 going back to 1928.
Josh here – 80% of the time is pretty powerful, now if only someone would tell us when we’re in the other 20% of the time
What you need to know about the January Barometer
Chart Talk – Bank of America Merrill Lynch
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The Reformed Broker is a blog about financial markets and the economy. Joshua Brown is a New York City-based investment advisor for high net worth individuals, charitable foundations, retirement plans and corporations... More.